By Sunny Oh
U.S. Treasury yields fell slightly on Thursday after officials at the European Central Bank said it had yet to discuss tapering its asset purchases.
What are Treasurys doing?
The 10-year Treasury note yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% was down 1.2 basis points to 1.554%, while the 30-year bond yield /zigman2/quotes/211347052/realtime BX:TMUBMUSD30Y 0.00% fell 2.4 basis points to 2.240%, its lowest in a week. The 2-year note rate /zigman2/quotes/211347045/realtime BX:TMUBMUSD02Y 0.00% was flat at 0.151%.
What’s driving Treasurys?
The European Central Bank, as expected, left interest rates unchanged and made no changes to its bond-buying efforts on Thursday. The ECB said its asset purchases, as decided at the ECB’s previous meeting, will continue at a significantly faster pace over the current quarter.
ECB President Christine Lagarde said policymakers didn’t discuss phasing out the ECB’s bond-buying program, adding such a move would be “premature.”
The 10-year German government bond yield /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y 0.00% was up 0.9 basis point to negative 0.251%.
Japanese investors continued to show demand for overseas debt, snapping up $8 billion of overseas bonds, which can include Treasurys, according to data from Japan’s Ministry of Finance. Attractive yields, even hedged out for foreign currency fluctuations, have helped lure income-starved foreign buyers to U.S. debt markets.
In U.S. economic data, initial jobless benefit claims fell to a pandemic low of 547,000 in the week ending in April 17, from 586,000. Existing home sales for March fell to an annualized pace of 6.01 million, down 4.3% from the previous month.
What did market participants say?
“For financial markets, the acceleration of European vaccination programs so far this quarter, and the resilient confidence surveys in the face of tighter restrictions, are strong enough a rationale to price the start of an economic recovery. In the world of central banks, they are welcome but too tenuous to drive a change of policy,” said Antoine Bouvet, senior rates strategist at ING.